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Question - One of the products that Jackson Ltd manufactures is known as Product (B). Unit cost and revenue data for the product is provided below.
£
Selling price 30.00
Variable costs 12.00
Contribution 18.00
Fixed costs are £66,000 per month.
Last month the business produced and sold 6,400 units. This activity level represents 80% of current production capacity.
Required -
1. Calculate the contribution / sales ratio (C/S %)?
2. Calculate the product break-even point (in units and £s sales)?
3. Calculate the level of sales (in units and £s) required to produced profits of £42,000?
4. Calculate the current production capacity (in units)?
5. Calculate the margin of safety (in units and £s)?
6. Calculate the total business profits if all spare capacity were to be sold for £20.00 per unit?
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